Eun Sung-soo, Financial Services Commission Chairman, "Pursuing Exclusion of SPCs and Real Estate Corporations from IB's Credit Extension Targets"

Eun Sung-soo, Chairman of the Financial Services Commission, is speaking at the CEO meeting of the financial investment industry held on the 7th at the Financial Services Commission's main conference room in the Government Seoul Office Building, Jongno-gu, Seoul. Photo by Moon Ho-nam munonam@

[Asia Economy Reporter Eunmo Koo] Eun Sung-soo, Chairman of the Financial Services Commission, stated on the 7th that he plans to review whether the newly introduced mega investment bank (IB) system, aimed at strengthening the corporate finance capabilities of securities companies, is being operated in accordance with its original purpose.

At the ‘Financial Investment Industry CEO Meeting’ held in the afternoon at the Government Seoul Office in Jongno-gu, Seoul, Chairman Eun said, “It is undesirable for funds that should be supplied to small and medium-sized enterprises (SMEs) to flow into real estate development projects through special purpose companies (SPCs).” He added, “We plan to conduct an accurate fact-finding investigation and pursue measures to exclude SPCs and real estate-related corporations from the scope of SMEs defined as credit recipients of IBs.”

He explained, “The purpose of the IB system is to discover companies with growth potential but currently insufficient financial performance that have not received adequate funding, and to help them grow.” He continued, “We will activate business operations that align with the purpose of mega IBs and SME-specialized securities firms to ensure smooth funding supply to innovative companies.”

He also emphasized the establishment of a thorough internal control system. Chairman Eun said, “Concerns about private equity funds have increased due to recent issues such as the DLF incident and the large-scale redemption suspension of Lime Asset Management.” He urged, “The industry itself should make efforts to establish a flawless internal control system so that private equity funds can develop into a qualitatively mature market and regain investors’ trust.”

He did not forget to mention the need for developing diverse products. Chairman Eun pointed out, “The direct trading amount of overseas stocks by our citizens reached 39 trillion won last year.” He said, “For the virtuous cycle of the national economy, it is desirable that more funds be invested in the domestic capital market. Therefore, in the low-interest-rate era, we need to develop various products that satisfy the growing demand for medium-risk and medium-return investments.”

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